Kalshi expands prediction-market reach into small-business hedging and clinical-trial betting

Kalshi, the CFTC-regulated prediction-market exchange, is simultaneously expanding into two very different areas: a new AI tool called Blanket that helps small businesses use its markets to hedge everyday risks, and betting markets on clinical trial outcomes and FDA drug approvals, which patient advocates and bioethicists have criticized as dangerous. Both developments show the exchange pushing prediction markets beyond speculation and into higher-stakes, more consequential territory.

What is Blanket and who built it?

Blanket is a new tool, launched publicly this week at tryblanket.app, built by London-based founder Lauris Zminsky, a former consumer fintech entrepreneur and trained financial economist who describes himself online as a “forward deployed philosopher” pursuing “markets for all priceable states of the world.” Zminsky built and owns Blanket independently — he does not work for Kalshi, though he says he has close ties to the company through friends who work there, including one who helped him on an earlier project matching S&P 500 companies’ risk factors to existing Kalshi markets.

Blanket is described as the “self-serve” version of that idea, aimed at small businesses rather than large corporations. A user — Zminsky gives examples like a bar owner, laundromat operator, or regional restaurant — types in a specific worry, such as an active hurricane season, rising fuel prices, or an unusually warm winter, and an AI “reasoning engine” suggests specific yes-or-no Kalshi markets that could offset that risk if it materializes. Zminsky said the idea grew out of a May promotion Kalshi ran with sports bars, which made him wonder whether the same logic could scale into a self-service hedging tool for any small business owner.

Does Blanket let people place bets directly?

No. Zminsky was explicit that Blanket itself is not a trading platform and no money moves through it. It functions purely as a discovery and reasoning layer that points users toward specific Kalshi contracts; once someone clicks through, all execution, compliance checks, and customer vetting happen on Kalshi’s own regulated platform. Zminsky framed the tool modestly, saying it likely won’t reshape how small businesses operate but can help owners “de-risk” parts of their balance sheet by identifying and correctly sizing the right bets.

What’s happening with clinical trial betting on Kalshi and Polymarket?

Separately, Kalshi and its rival Polymarket have opened markets letting users bet on the outcomes of clinical trials and on whether the FDA will approve specific new drugs. Kalshi argues this creates useful new information for investors — signals about which drugs are likely to win approval or which trials are likely to succeed — that could help direct funding toward promising treatments. Kalshi spokesman Jack Such defended the practice by comparing it to the stock market, where short sellers already profit from clinical trial failures, arguing that if critics want to ban profiting from trial failures, “you would start with the stock market.”

Why are critics calling this “ghastly”?

The criticism centers on the fact that real patients — not just abstract market outcomes — sit on the other side of these bets. Boston University humanities professor Joshua Pederson, whose 12-year-old son has been through cancer treatment and is now enrolled in a clinical trial for a novel therapy, said the CEOs promoting these markets have ignored that a trial’s failure translates directly into human suffering: fewer treatment options, and potentially death, for patients like his son. He argued that framing a failed trial as a market outcome sanitizes what it actually represents. Researchers cited in the reporting separately warn that allowing bets on trial results could create incentives for insider trading and could compromise the integrity of the clinical trial process itself, given how much material non-public information trial participants, researchers, and drug company employees might have access to.

How do these two stories connect?

Though Blanket and the clinical-trial betting controversy are distinct developments reported separately, they reflect the same underlying trend: prediction markets, once associated mainly with elections and sports, are rapidly moving into domains with real economic and human stakes — small business risk management on one hand, and life-or-death medical research on the other. Kalshi’s growth as a CFTC-regulated exchange has made it a hub for this expansion, with outside entrepreneurs like Zminsky building tools on top of its infrastructure even as regulators, researchers, and the public grapple with how far these markets should reach.

What happens next?

Blanket has just gone live publicly after a period in stealth, and its actual usage among small businesses remains to be seen. On the clinical trial betting front, the tension between Kalshi’s stated rationale — better information for investors — and critics’ concerns about patient harm and market manipulation is unresolved, with no indication yet of regulatory action or a policy change from either Kalshi or Polymarket.

Sources

• Fortune
• NPR Business

Featured photo: Veo 3, prompted by P.J. Accetturo via Wikimedia Commons (Public domain)